The Agreus and KPMG Private Enterprise 2023 Global Family Office Compensation Benchmark Report reveals that more than 60% of family offices cited wealth preservation and long-term growth as the primary purpose of their operations. For families focused on long-term success, one critical yet often underestimated enabler is the Investment Committee (IC).
While many family offices have historically relied on informal decision-making, growing portfolio complexity, evolving family dynamics, and rising expectations for transparency are elevating the importance of structured governance. This has propelled ICs to the forefront of governance. Despite their growing importance, many families lack clarity around what these committees should do, who should sit on them, and how they can be leveraged most effectively.
This article explores the evolving role of Investment Committees in family offices, including their structure, core responsibilities, and the types of expertise required to make them effective. Drawing on our experience advising and recruiting for family offices worldwide, Agreus offers a practical view on how to create committees that combine technical acumen with cultural alignment.
What is a Family Office Investment Committee?
An Investment Committee is a formal governance structure responsible for overseeing a family office’s investment activities. Its purpose is to ensure that investment decisions align with the family’s financial objectives, risk tolerance, and long-term vision.
We have previously discussed the importance of an Investment Committee on Forbes. In contrast to informal or ad-hoc investment decision-making, which is often led solely by principals or close advisors, a structured committee provides a level of oversight, accountability, and strategic direction. Its primary roles include:
- Strategic Oversight: Setting and periodically reviewing investment strategy and asset allocation.
- Monitoring Performance: Evaluating portfolio performance against agreed benchmarks and objectives.
- Risk Management: Providing checks and balances to reduce over-reliance on individual decision-makers.
By embedding these practices into a formal committee, family offices can better navigate today’s increasingly complex investment landscape.
Core Responsibilities
A well-structured IC plays a critical role aligning day-to-day decisions with the family’s strategic investment goals. Key responsibilities typically include:
- Setting Investment Policy Statement (IPS): Establishing clear guidelines on asset allocation, risk appetite, and return expectations.
- Evaluating Opportunities: Reviewing and approving new investments, managers, and vehicles.
- Monitoring Performance: Assessing the health of the overall portfolio, measuring against benchmarks, and recommending changes when needed.
- Liquidity and Legacy: Ensuring that short-term liquidity needs are met without compromising the long-term preservation of wealth across generations.
Ultimately, the IC acts as a bridge between the family’s values and the operational execution of their investment strategy, providing discipline, continuity, and adaptability.
Who Should Sit on an Investment Committee?
While the structure of an Investment Committee varies by family office size and complexity, successful committees share common characteristics in terms of composition and expertise:
Typical size:
- Between 3 and 7 members, depending on the complexity of the portfolio and governance needs.
Suggested Composition:
- Family Members: One or two representatives, often principals or next-generation leaders, to ensure alignment with family vision and values.
- Internal Executives: Key individuals such as the Chief Investment Officer (CIO), CFO, or other senior investment professionals.
- Independent advisers: Specialists with deep expertise in investments (depending on the asset classes and strategies needed), legal or tax.
- Chairperson: A trusted adviser or senior family member who understands the family’s ethos and can lead with both authority and neutrality.
While there is no one-size-fits-all answer, we believe that the ideal composition should include a blend of:
- Technical Expertise in finance, asset management, macroeconomics, and risk.
- Family Perspective to keep decisions grounded in values and long-term intent.
- Independent Insight from non-family professionals to challenge assumptions and avoid groupthink.
Success depends not just on credentials, but on the ability of members to collaborate, challenge constructively, and maintain trust.
As family offices mature, informal or personality-led investment processes become harder to sustain. The move toward formal Investment Committees is no longer simply a best practice, it is fast becoming a necessity.
As outlined in our Family Office Maturity Model, professionalising governance ensures not only operational resilience but also strategic foresight. A high-functioning IC can transform investment decision-making from reactive to visionary, supporting both current returns and multigenerational legacy.
Process of identifying the IC members
While agreeing on the type of individual who takes a seat at the IC, we must not ignore how this person was appointed for the role. We are currently in the process of collecting data for our family office governance report and we have been analysing how IC members, their selection process and its impact on the overall effectiveness of the IC. We found that the effectiveness of ICs shoots up dramatically when they have undergone a professional search process to identify the best person for the role.
Our findings were interesting and indicate that the vast majority of family offices rely heavily on existing relationships or close contacts when appointing IC members. While this approach may seem convenient, it often lacks the objectivity necessary for good decision-making. You may not always be appointing the best person for the job. In contrast, the few family offices that undertake a professional and structured search process to identify and recruit IC members tend to have the most effective ICs, highlighting the value of a more deliberate and merit-based approach to committee composition.